Peak oil - Feb 14

Mr. Darcy’s earth shattering resultsPeter Tertzakian, Calgary Herald A flashback to history provides the background we need to understand why there is a technological revolution happening in the oil and gas industry and why peak oil theorists may need to go back to math class.

... Darcy’s Law, as applied to an oil well, says that the proprietor can do three things to improve the flow of his hydrocarbon treasure: (1) increase the pressure difference between the oil at the bottom of the hole relative to the surface; (2) enlarge the contact area between the sides of the well bore and the oil-bearing rock; or (3) open up the pores in the rock to channel more oil into the well (otherwise known as increasing the ‘permeability’).

For the first 100 years of the industry, up to about the mid-20th century, oilmen mostly left Darcy’s Law to nature. Back then it was relatively easy to find high-quality oil reservoirs with high enough pressure and permeability to push the fluid all the way up a vertical hole in the ground with no artificial intervention. But by the 1960s, it was getting harder to find wells that naturally optimized Darcy’s formula. After most of the high-pressure ‘gushers’ had been discovered (and brought under control by John Wayne) human intervention was needed to juice Darcy’s Law – without destroying the well, of course.

Engineers dusted off Darcy’s formula. Tinkering with the pressure dimension was the first place to start. Pumps and compressors were introduced on wells to either push or suck the hydrocarbons out of the ground with greater and greater vigor. Techniques included pumping water down into oil reservoirs, a common practice called ‘water flooding,’ that pushed trapped oil up a producing well.

... Peak oil theorists, among others, have held to the notion that the diminishing number of gushers found over time, combined with progressively ‘maturing’ wells that can’t be pumped any harder, ultimately point to irreversible, downward trend lines for oil production. In part, this belief has assumed that rock permeability is a geological fixture that human ingenuity could not easily alter. Merit remains in some peak oil arguments, but in the last 10 years the industry has come full circle on Darcy’s Law, a largely unexpected event. No retro futurist, except those driven by ingenuity, counted on a resurgence of modern day ‘torpedoing’; in other words, man’s ability to inflict large-scale changes to Darcy’s calculus of flow through large-scale changes to permeability.

... If past tinkering with Darcy’s Law is any indication of future potential, the oil and gas industry is once again on a path to renewal for several decades to come. (13 February 2012)

Four Scenarios For The Future Of EnergyAriel Schwartz, Co.Exist We are reaching an historical inflection point, where our current decisions about energy use and carbon will have major effects on how we live in coming decades. Here are four possible scenarios for what things will be like in 2025.

Growth: A Rising Tide

In this optimistic scenario, peak oil is reached in 2024. Both fossil fuels and renewable energy sources play a big part in the energy market, but cost parity is near for renewables, which means they’re about to gain an edge. Wise investments in the smart grid and new sources of energy have generated millions of green jobs. A robust energy infrastructure uses the 20th-century grid as a backbone but is filled with smart-grid upgrades. Unfortunately, temperatures are still rising. Instead of attempting to stop temperatures from rising further, we focus on geoengineering and other adaptation techniques.

Constraint: Sharing the Load

The government has taken direct control over the energy industry thanks to massive oil spills, nuclear disasters, and record profits for oil companies. In this scenario, renewables never even had a chance to reach grid parity--mandatory government efficiency requirements have forced people to curb energy use. Sensors and smart meters set household thermostats at optimal regional levels, and local energy sharing is beginning to look attractive. People have enough energy for their needs, but no more. (13 February 2012)

UPDATE: Terry Berg kindly translated the article into English. It is in the Comments below.

Flawed views on peak oil rear their ugly heads againRobin Mills, The National The debate over peak oil is stalked by zombie ideas that live on, no matter how many times they are stamped upon. The latest significant article warning of declining oil supplies manages to revive not just one but at least six of these false concepts.

... The idea that oil production has not risen above 74 million barrels per day (bpd) since 2005 relies on a very narrow definition of "crude oil". In reality, oil demand is now met from a range of sources, including biofuels and petroleum extracted from natural gas.

To the motorist, the end product is indistinguishable. Figures from the US Energy Information Administrationsuggest that, for the first time, total production topped 90 million bpd at the end of last year.

Automatically ascribing a slowdown in production growth to physical resource constraints fails to consider the economic and policy context.

... And with more than a century's worth of resources of both coal and natural gas, it does not matter whether reserves are somewhat overstated. The production of coal, in particular, is constrained by economics and environmental concerns, not by physical availability.

The final piece in the peak-oil puzzle is the idea that declining oil production must bring a halt to economic growth. But Michael Levi from the US-based Council on Foreign Relations notes in a comprehensive demolition of the Nature article that the American economy has persistently grown much faster than its oil consumption. (14 February 2012)

Gasoline will hit $5 per gallon this year, predicts John Hofmeister, former president of Shell Oil Company, the U.S. subsidiary of Royal Dutch Shell. He points to rising demand by developing countries, especially China and India, and says that the recent increase in U.S. oil supply rates and decrease in demand is not enough to offset global trends, and that prices will continue to creep upward, unless there are major changes in public policy to substantially increase domestic U.S. supply.

Gasoline prices could suddenly spike even higher, and though increases in U.S. domestic supply may be important, no realistic U.S. increase will offset declining yields from other nations, according to Professor Tadeusz Patzek, chair of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin, and vice-president of ASPO-USA's board of directors. He highlights that declining output from most oil-exporting nations over the past decade, in the face of rising global demand, is likely to create a lasting drop-off in global availability of oil—spelling serious consequences for all oil-importing nations, including the United States. Building an economy that runs on half as much oil is essential and unavoidable, according to Dr. Patzek.

Regardless of who is right, this issue needs to be examined with seriousness and urgency, which has been the driving motivation behind the collaboration of multiple University of Wisconsin and local Madison groups that are co-sponsoring this event.

About John Hofmeister Former President, Shell Oil Company Author, Why We Hate the Oil Companies Member, US National Energy Security Council Founder, Citizens for Affordable Energy http://www.citizensforaffordableenergy.org/

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